Psychedelics Stock Champignon Brands Soared 15% Today Officially Breaking Out of its Bullish Chart Formation
Bull Pennants Are Continuation Patterns, Indicating SHRM’s Current Uptrend is Highly Likely to Continue
Shares of Champignon Brands’ (CSE: SHRM) (OTC: SHRMF) (FRA: 496) CSE listed SHRM stock experienced a technical breakout today from its bull pennant chart formation. SHRM surged 14.75% today to close the trading session at $0.35 per share, which was also the high of the day.
Champignon Brands is a leading psychedelics and health and wellness company specializing in novel delivery platforms for the pharmaceutical and nutraceutical industries. Champignon is also focused on the formulation of its suite of medicinal mushroom health products, which is highlighted by the company’s flagship brand, Vitality Superteas.
Champignon has ambitious plans for 2020, which includes creating the most compelling IP portfolio, clinical pipeline and drug development platform in the psychedelics space. In Q3 of this year, the company intends to begin developing medicinal psychedelics through clinical trials, which will include developing non-hallucinogenic and hallucinogenic therapies using psychedelic substances such as Psilocybin, MDMA and LSD.
Champignon recently acquired Novo Formulations, a specialty biotech firm that’s currently working with Ketamine, Anaesthetics and Adaptogenics. The company will leverage the Novo deal to pursue Psilocybin and MDMA formulations.
Today, Champignon announced that it bolstered its Special Advisory Committee by adding Dr. Joseph Gabriele to the team. Dr. Gabriele is the inventor of the transdermal delivery platform Delivra™ and was also the 2018 Ernest & Young Health Care Entrepreneur of the year.
Today’s article will focus mostly on the technical analysis of Champignon’s stock chart. For more information on the company, please read our previous SHRM articles here or visit the Champignon Brands website here.
For those unfamiliar with bull pennants or technical analysis in general, below is a brief explanation of how these chart patterns work, which will also put today’s extremely bullish move by SHRM into perspective.
What is a Bull Pennant?
Bull Pennants are a type of chart pattern in technical analysis that falls under the category of continuation patterns. The pattern gets its name because it resembles a psychical baseball pennant. As the name implies, a continuation pattern suggests that following a brief period of consolidation, the price of a stock will continue to move in the same direction of its current trend.
Bull pennant patterns are formed in the following way:
- A stock experiences a large vertical movement to the upside. This creates the pattern’s ‘Flagpole.’
- After the verticle move higher, a period of consolidation follows where the support and resistance trendlines converge towards each other. The converging trendlines create the appearance of a ‘Pennant.’
- A successful Bull Pennant pattern is completed when the stock experiences a strong breakout above the upper trendline, which also provides technical traders with confirmation that the uptrend will continue.
Champignon Brands went public on March 2nd, becoming the first psychedelics firm to IPO in 2020. MindMed (NEO: MMED) (OTC: MMEDF) (FRA: BGHM), which is backed by former Canopy Growth (TSX: WEED) (NYSE: CGC) (FRA: 11L1) CEO Bruce Linton and Kevin O’Leary, went public the following day. When we compared SHRM and MMED’s first week of trading, it was clear that investors favoured Champignon Brands as SHRM closed its first week up 79%, while MMED closed down 8%.
On its first day of trading, Champignon’s stock opened at $0.195, and just three days later, SHRM reached a high of $0.445. SHRM’s sharp move to upside created the ‘Flagpole’ of its bull pennant chart pattern.
For the next 13 days, SHRM consolidated sideways into a tighter and tighter trading range. The tightening of SHRM’s trading range caused its support and resistance trendlines to converge, which created the ‘Pennant’ formation of the chart pattern.
This period of consolidation ended today as SHRM soared 14.75% blasting through the upper trendline and closing at the high of the day. Today’s breakout confirmed the successful completion of SHRM’s Bull Pennant continuation pattern. While it’s true, SHRM has only been public for about a month, the stock is still considered to be in an uptrend thanks to its very strong first week of trading. Following today’s price action, the probability of SHRM’s uptrend continuing has been increased substantially.
The psychedelics sector is in its infancy and closely resembles the cannabis industry when it first began its meteoric rise. Investors that are interested in profiting off this burgeoning new sector or missed out on the cannabis boom should move Champignon Brands’ stock to the top of their watchlist immediately. For investors that are serious about taking part in the rapidly evolving ‘Shroom Boom,’ Champignon Brands is a must-have stock in your portfolio.
SHRM Stock Price Action & Chart
Shares of Champignon Brands’ CSE listed SHRM stock closed trading today at $0.35 per share, up 14.75% on the day. The company’s new U.S. OTC Market’s listed SHRMF stock closed the day, even at $0.23. Since Champignon’s U.S. shares were just listed recently, we expect the liquidity to rise in the coming weeks. Overseas on the Frankfurt Stock Exchange, Champignon’s German listed shares soared 15.26% to close today’s trading session at $0.22 per share.
Champignon Brands is a paid client of The Cannabis Investor. The Cannabis Investor holds a position in Champignon Brands.
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